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Latin America Investment News on Viva Tropical

Moving Money Between Central American and USA is Muddled; New Tool Aims for Transparency

Article Summary:

Multilateral Investment Fund (MIF), which is a member of the Interamerican Development Bank (IDB) and World Bank are sponsoring a free online tool aimed at making transparent the costs of sending funding funds between Central America and the USA.

Photo Credit: Estrategia y Negocios

Original Article Text From Estrategia y Negocios via Google Translate :

Launch Web to compare cost of sending Remittances

Multilateral agencies on Thursday launched a free online tool to compare and make transparent the costs of remittances from the U.S. to six Central American countries and Dominican Republic.

“This initiative will help the Hispanic community to better understand the costs and options before deciding how and with whom you want to send their money,” said Paloma Monroy, remittances specialist of the Center for Latin American Monetary Studies (CEMLA)

CEMLA is the entity that implements the initiative www.enviacentroamerica.org supported by the Multilateral Investment Fund (MIF), which is a member of the Interamerican Development Bank (IDB) and World Bank.

“This tool will create more transparency in this market, contributing to reduced costs,” said Monroy.

The website provides detailed and updated monthly on how much it cost to send money from U.S. to Costa Rica, El Salvador, Honduras, Guatemala, Nicaragua, Panama and Dominican Republic. Costs were calculated based on amounts of $ 200 and $ 500.

The site offers information on what they charge different operators in five major areas of remittances in the United States are California, District of Columbia, Florida, Massachusetts and New York) to Central America.

“Remittances are a vital income for millions of families in Central America and the Dominican Republic,” said Massimo Cirasino, who heads the Financial Infrastructure Division of the World Bank. ”

It is estimated that only in the last quarter of 2011 the emigrants from the six Central American countries and the Dominican Republic spent more than $ 200 million to cover the costs of sending remittances to their families from the United States.

“By increasing the transparency of the market, providing more information on prices of remittances, immigrants may have a better idea about the options available and choose the service that best meets their needs,” said MIF remittance specialist, Natasha Bajuk.

According to the IDB, in general, it is cheaper to send money to an account, which costs nine dollars, than in cash, amounting to $ 11.

However, the volume of shipments by commercial banks is still small compared to shipments made through remittance companies.

Many providers offer remittance services to send money from U.S. to Central America through debit and credit cards with cash or deposit account, but the costs are more expensive.

According to the IDB, the immigrants from Central America and Dominican Republic paid on average about 12 per $ 200 shipped.

A reduction of one percentage point in the cost of sending remittances would save immigrants and their families about $ 150 million a year.

The average price of sending remittances from the U.S. to Central America and the Dominican Republic has fallen slightly in the last three months of 2011, from 5.9% in October to 5.7% in December.

In December, the most expensive items were the Dominican Republic and Costa Rica, with an average of U.S. $ 14.60, or 7.3% to U.S. $ 13.60 or 6.8%, respectively.

The cheapest were shipments to El Salvador, with an average cost of U.S. $ 9.40 or 4.7%, followed by Honduras and Nicaragua, both with average cost of U.S. $ 9.60 or 4.8%.

Link to Original Article:

From Estrategia y Negocios

Latin America Investment News on Viva Tropical